CA Business Law 2

Question 1

Under the UCC, a merchant's firm offer to buy or sell goods is irrevocable for up to how long without consideration?

Accepted Answer

90 days

Answer

UCC §2-205 makes a merchant's signed, written firm offer irrevocable for the stated period or up to 3 months (90 days).

Question 2

Which doctrine allows a court to refuse enforcement of a contract that is excessively one-sided or oppressive?

Accepted Answer

Unconscionability

Answer

Unconscionability allows courts to refuse enforcement of contracts with unfair terms (procedural or substantive), especially against weaker parties.

Question 3

A limited liability company (LLC) that fails to elect a tax classification is treated by the IRS as which of the following by default if it has two or more members?

Accepted Answer

Partnership

Answer

By default, a multi-member LLC is taxed as a partnership unless it elects otherwise on Form 8832.

Question 4

Which element distinguishes a general partnership from a joint venture?

Accepted Answer

Joint ventures are limited to a single project or transaction

Answer

A joint venture differs from a general partnership primarily in that it is organized for a single specific project or transaction rather than an ongoing business.

Question 5

Under agency law, which type of authority arises when a principal's conduct leads a third party to reasonably believe the agent has authority?

Accepted Answer

Apparent authority

Answer

Apparent authority is created by the principal's words or conduct that cause a third party to reasonably believe the agent is authorized to act.

(CA) Certified Accountant Practice Test

(CA) Certified Accountant Practice Test

CA Business Law 2